3 Money Secrets We Can Learn From The Amish Lifestyle

When we think of the Amish, we think horse-and-buggy, straw hats, deep faith, community, craftsmanship and great financial advice.

Wait. What was that last one? You heard right. While the Amish aren’t writing books or doing podcasts on how they stay out of debt and save money, they have a reputation for leading prudent and frugal financial lives.

Here are three money secrets from the Amish lifestyle that you’ll find fascinating, and full of common sense. Consider implementing some of these strategies into your approach to money and you may be surprised by the result. These tips are proof that sometimes the best solutions are the simplest.

1. Live without debt– America is the land of buy now, pay later. The Amish, however, don’t ascribe to this way of life.

Most Amish pay cash for things to avoid debt. While it is true that some Amish will indeed use credit cards for the reward points and convenience, the number who actually carry a credit card is only about 20%. They also live by the rule of always paying someone on time.

Perhaps most importantly, the Amish focus on whether an item is a need or a want. This distinction is so important that they teach their children the value of deciphering between the two in order to avoid unnecessary debt. By instilling this philosophy into their children from an early age, they raise appreciative kids who value the things they do have.

Frugality and resourcefulness also pave the way to debt avoidance – clothing that is worn beyond use is cut for rags and broken tools are repaired. Part of the Amish philosophy is that everything has a purpose; the Amish don’t succumb to the insatiable desire of consumerism and brand names.

The result? By focusing on quality, care, and delayed gratification, the Amish create wealth that can be used for significant purchases that actually add to long-term happiness and financial security.

2. Barter when possible – Sure, cash reigns supreme, but bartering is a close second. Bartering often involves both tangible items and trades for services and skills training. Long used by the Amish, bartering can be a viable option for offloading unwanted items for things that have value to you.

The Amish provide products and services to both their own Amish markets and non-Amish (or English) markets. The scope of their businesses can even reach far beyond their local communities to the nation as a whole. For instance, an Amish farmer may trade a cow for some handmade rugs. Later, the farmer can sell these rugs at a market or roadside stand. Using the barter system, the Amish obtain items they need, and then use these items to generate cash.

Today, bartering may seem like a thing of the past, but this is a misconception. Opportunities to swap goods or share skills exist both on-site and online – think about trying this method out at a local yard sale or flea market, or on Craigslist. The possibilities are endless once you insert bartering into your financial vocabulary.

3. Live without social safety nets – Receiving food stamps, a welfare check, or government handouts is something the Amish frown upon. In fact, the self-reliant Amish generally reject all government handouts. Roots of this philosophy can be tied to the Amish’s self-sufficiency and strong community. This is not to intimate, however, that the Amish don’t believe in helping hands; if a member of the community is having a rough spell financially, other members will lend assistance.

Part of what allows the Amish to be so self-sufficient is their savings policy. While the average American saves somewhere in the 5% range, the average Amish adult saves close to 20% of their monthly income. Savings becomes a way of life for the Amish and creates a sense of financial independence. The Amish cherish knowing that they owe money to no one, and are instead accruing interest on their savings.

And finally there’s this. The Amish derive much of their satisfaction from a deep religious faith. That’s a trait shared by the happiest retirees I met while researching my book, You Can Retire Sooner Than You Think.

So, maybe the biggest lesson we can learn from our Amish brethren is that money isn’t the key to happiness.

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